Q1) On July 1, 2008, market interest rate is 7%. Electronic Financial Group, Inc. (EFG) issues $300,000 of 8%, 20-year bonds payable at 110.625. Bonds pay interest on January 1 and July 1. EFG amortizes bonds by effective-interest method.
Questions:
1. Create a bond amortaization table for first four semiannual interest periods.
2. Record issuance of bonds payable on July 1, 2008, accrual of interest at December 31, 2008, and semiannual interest payment on January 1, 2009.